Types of

Organization
Structure
What are the four types of
organization structure?

What are its advantages and

disadvantages?

How do it looks like?

 Four Types of Organization
Structure

Line Organization Committee

Line and Staff Functional

Organization Organization
 Line Organization

Functions

Advantages Overview Disadvantages

 Functions

► Simplest form of Structure

► Direct Single Lines of Authority
► Based on Classical Principle of
Scalar Chain
► Has only direct vertical
relationships between different
levels in the firm.
 Advantages

 Simplicity
 Clear-cut division of
Authority and Responsibility
 Strong Discipline
 Unified Control
 Prompt Decisions-
 Flexibility
 Disadvantages

χ Heavy Burden of work

χ Concentration of Authority
χ Lack of specialization
χ Lack of communication
χ Scope for favouritism
 Overview

Plant
Manager

Foreman Foreman

Worker Worker Worker

 Line and Staff
Organization

Overview Functions

Advantages Disadvantages
 Functions

 Utilizes the Assistance of Experts or

Specialists
 Line and staff have direct vertical
relationship between different levels.
 Staff specialists are responsible for
advising and assisting line
managers/officers in specialized areas.
 These types of specialized staff are (a)
Advisory, (b) Service, (c) Control e.g.,
 Advantages

 Decision Efficiency
 Company Oversight
 Expert Advice
 Productivity
 Disadvantages

χ Authority
χ Decision Making
χ Conflict
χ Cost
Overview
 Overview
Functions

Advantages Disadvantages
 Functions

 Utilizes the pure services of

experts or specialists
 Removes staff specialists from
“assisting” capacity and gave them
pure authority and responsibility
 Naturally attempt complete
reorganization on a functional bass.
 Advantages

 Specialization
 Efficiency and
Productivity
 Disadvantages

χ Lack of Teamwork
χ Difficult
Management Control
 Overview

Gang Work Shop

Inspector
Boss Boss Boss

Instruction Speed Repair Time Boss

Boss Boss Boss
 Principles
Objectives

Advantages Disadvantages
 Advantages

 Pooling of knowledge and

experience
 Improved communication
 Facility of coordination
 Better motivation
 Democratic management
 Disadvantages

χ Indecisiveness
χ High costs
χ Domination by few
χ Lack of secrecy
χ Compromised decisions
 Standing Committee

Executive • authorized to meet and take action

Committee between board meetings.

Audit • Committee selects the outside auditor, meets

with the auditor to receive the audit report
Committee and management letter.

Governance • charged with the care and feeding

Committee of the board itself.

Finance •oversees the preparation of the annual budget and

the performance of the organization in meeting its
Committee budgeted revenues and expenses.

Membership •developing criteria for membership, credentialing

members, overseeing elections, and developing and
Committee delivering programs for the members.

Program • is charged with overseeing the

Committee organization’s programs.
 Ad Hoc Committee

Bylaws • with reviewing the organization’s

bylaws and current practices to
Committee ensure that they are synchronized.

Capital
• to raise funds for the capital
Campaign campaign
Committee
Strategic • responsible for developing or
Planning updating an existing strategic
Committee plan.